HST CHANGES / TAX CODING

We are fast approaching the HST Conversion date and I hope everyone has had time to consider their start up strategies. In at least a couple
of cases I have clients that will be doing July invoices before completing their June invoices. In this case timing will be important to make
sure all invoices are taxed at the correct rates. I would expect that company purchases may be down slightly in June, rising again in July as
companies take advantage of the additional input tax credits.

Most companies should be able to complete their June invoicing and post it prior to doing any July invoicing. Then the simplest approach would
be to set the GST rate to 13% and the PST rate to zero if you only deal with Ontario customers. Similarly BC would set the GST rate to 12% and
PST rate to zero.

For users that have customers outside of Ontario the HST presents additional challenges. In Ontario users can just set GST to 13% and PST to zero%.
But if you used GST at 5% for other provinces as well with the same Tax Code you will have issues.

Within Libra’s Order Entry program, individual provinces are supported. You can alter the GST rate for Ontario Customers without affecting the
other provinces. In many custom written Order Entry/Invoicing programs there is only a single GST rate, so the solution may be to increase the
PST rate to 13% and code the customers as being PST Taxable only. In either case and when coding the GST or PST as 13% you will probably want to
create a new G/L account for HST to keep them separate.

ORDER ENTRY TAX CODING GUIDE

In Ontario, customer Tax Codes were typically 61011 for GST Only and 61031 for Both Taxes extra.

Quebec was always 62031 - Both Taxes Extra for almost all customers. This has not changed.

For other provinces you will need several codes to accommodate GST & HST if you deal with those provinces.

The following are examples:

63011 – HST Only at 12% - British Columbia

64011 – GST Only at 5% - Alberta ( Could also be used for Saskatchewan, Manitoba if GST Only is required )

65011 – HST at 13% - New Brunswick, Newfoundland ( Could also use 61011 Ontario )

66011 – HST at 15% - Nova Scotia Only

Variations are possible. Remember, if you currently collect the GST, you must also collect HST for the provinces affected.

For each different Tax Jurisdiction you use, you will need to set up the Tax Records in Order Entry to match.